The legal battle over the future of Sharon Regional Medical Center and its more than 700 employees went before a Mercer County Judge Friday morning.

Common Pleas Court Judge Tedd Nesbitt heard a petition from Pennsylvania Attorney General Michelle Henry, who asked that the hospital’s real estate be returned to the original charitable foundation, the Christian H. Buhl Legacy Trust, who made a deal with Steward back in 2014.

The Commonwealth of Pennsylvania is seeking to reclaim the hospital, arguing that its sale to Medical Properties Trust (MPT) violated a 2014 agreement that required the hospital’s owner to obtain the Buhl Trust’s consent for any property sales within five years of the transaction.

The attorney general alleged that the sale to MPT and subsequent leaseback to Steward circumvented the agreement. Additionally, the Commonwealth claims that the sale resulted in a $20.2 million shortfall in promised capital improvements and that Steward owes more than $500,000 to Pennsylvania.

The Buhl Trust has also joined the legal action, emphasizing the importance of the hospital to the community. Both the Trust and the Commonwealth are advocating for a buyer who will uphold the original agreement and ensure the hospital’s continued operation.

At the end of the hearing, Judge Nesbit issued an order of the court and preliminary decree to Community Health Systems Inc., MPT of Sharon-StewardLLC and Medical Properties Trust, asking the three parties to "show cause why the relief requested by [Commonwealth of Pennsylvania] should not be granted.

The judge ordered the parties to an evidentiary hearing on December 19 at 10:30 am, with preliminary oral argument at 10 am. 

The Mercer County Court hearing was held amid efforts by Pennsylvania officials to beat a bankruptcy judge-imposed Monday deadline to secure funding to keep the hospital open as negotiations continue to sell the hospital to Meadville Medical Center.

The state has been covering the cost to keep the hospital open since September. So far, it has provided $1.5 million per month, totaling $4.5 million. This month, Steward asked for $3 million, double what it cost to run the hospital in November.

The attorney general’s office is working with the Legislature to secure the funding.

Steward filed for bankruptcy last year and is selling off hospitals across the nation to recoup some of its money. Attorneys for Steward said they are concerned about the status of talks for Sharon Regional because it has been months and nothing has been finalized.

“Neither the Commonwealth nor Meadville has demonstrated any degree of reasonable certainty that they will be able to consummate a sale transaction to acquire Sharon Hospital, including the acquisition of the underlying real property owned by Medical Properties Trust, Inc. (‘MPT’), despite having months to reach an agreement,” a filing made by attorneys for Steward states.

A representative for the attorney general’s office said their “efforts have been enormous” and they are working every day on the deal. If Pennsylvania doesn’t come up with the money by midnight on Monday, Steward will have the right to start the process of closing Sharon Regional.